THQ's CEO has explained some of the reasoning behind the recent internal …

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Earlier in the week, THQ caused a stir by announcing that it was closing five of its studios and reducing the staff at two others. Now the company has finally explained its reasoning: this was an attempt to reduce costs and put a greater focus on a smaller number of core titles.

"Our goal is to improve performance and deliver profitable growth in fiscal 2010," THQ's president and CEO Brian Farrell explained. "The quality bar for core gamers continues to be set higher, and the cost to deliver this quality has increased significantly. As a result, we have reduced the number of core gamer games in our pipeline but will increase our developer budgets where appropriate to compete at the highest levels."

In addition to creating a few bigger budget titles, THQ also plans to increase its focus on the family-friendly and online games markets. Farrell also revealed that the studio cuts—which resulted in about 250 lost jobs—are not the only staff reductions that will happen at THQ. "Over the next several weeks we plan to reduce both cost and headcount in our corporate and global publishing organizations," he said.

Given the absurd amount of money that is costs to create a current-generation AAA title, it's becoming all the more difficult for mid-range developers like THQ to compete. Hopefully, these moves will allow the company to put some additional focus on key franchises like Company of Heroes and Saint's Row, and maybe even create some interesting new intellectual properties.